Pound Rallies Higher on Risk-On Sentiment and Weak US Dollar

The  British pound today rallied higher against the  US dollar in  a  move that was largely fueled by  the  greenback’s decline following yesterday’s geopolitical events. The  trade deal announced between the  US and  Mexico triggered a  risk-on sentiment across the  global financial markets, which triggered a  significant selloff of  the  US dollar boosting the  pound.
The  GBP/USD currency pair today rallied from a  low of  1.2860 in  the  Asian session to  a  high of  1.2920 in  the  early American session.
The  trade deal signed by  the  USA and  Mexico yesterday was the  main trigger behind the  greenback’s decline as  tracked by  the  US Dollar Index, which hit a  four-week low of  94.68 earlier today. President Donald Trump described the  deal as  being very good for  the  USA. The  fact that UK traders resumed trading today following yesterday’s bank holiday also contributed to  the  pair’s rally. However, the  pound’s rally was weighed down by  the  prospects of  a  no-deal Brexit, which according to  Theresa May would not be the  end of  the  world.
The  currency pair extended its gains following the  release of  the  US advance goods trade balance data by  the  Census Bureau in  the  early American session. The  US recorded a  trade deficit of  $72.2 billion, which was higher than the  expected $69 billion deficit. However, wholesale inventories came in  above expectations.
The  currency pair’s future performance is likely to  be affected by  the  release of  the  US consumer confidence index later today.
The  GBP/USD currency pair was trading at  1.2928 as  at  13:11 GMT having rallied from a  low of  1.2860. The  GBP/JPY currency pair was trading at  143.58 having risen from a  low of  143.04.

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